Mr Blunkett must have known when he rejoined the Cabinet in May that he could afford no more controversy. His resignation last year over the fast-tracking of a visa for his lover's nanny harmed the Government's credibility. His rapid return to the Cabinet after the election and his high-profile job of reforming the state pensions system meant he was always going to be under intense scrutiny. Yet Mr Blunkett finds himself in the dock once more.

The ministerial code of conduct is quite specific. It states that former ministers should consult the independent Advisory Committee on Business Appointments before taking up any job in the private sector within two years of leaving government. Mr Blunkett failed to do this when he joined the board of DNA Bioscience in April. And it has emerged that he deliberately ignored letters from the chairman of this committee reminding him of this responsibility. This demonstrated a wilful disregard for the ministerial code of conduct - an action clearly unworthy of a member of the Government.

Some important questions remain to be answered. Why did Mr Blunkett accept a job only weeks before his expected return to the Cabinet? And why did he not sell the shares he had acquired in DNA Bioscience as soon as he took up his new Government post? Mr Blunkett's allies have hinted at financial difficulties brought on by his recent paternity battle. If so, sympathy must be limited. Mr Blunkett has been drawing a cabinet minister's salary for almost eight years. And in any case, personal financial difficulties are no excuse for breaking the ministerial code.

There are also questions over Mr Blunkett's judgement in becoming involved with this particular company in the first place. DNA Bioscience is bidding for contracts with the Child Support Agency, a body that falls under Mr Blunkett's new responsibility at the Department for Work and Pensions. The company's rivals have complained that DNA Bioscience is ineligible to be on a list of bidding companies for this work. The potential for a conflict of interest in all this is glaringly obvious. At one time, Mr Blunkett would have recognised that danger.

It is heartening to see that the Cabinet Secretary, Sir Gus O'Donnell, is doing a decent job of clarifying the rules governing the conduct of ministers. It is unusual to have a head of the Civil Service who is prepared to take pre-emptive action, especially one who understands the press. But this affair does not simply concern the future of one minister. There are wider ramifications for the Government. One of the reasons Labour was swept to power so emphatically in 1997 was that Tony Blair promised his Government would be more transparent and less venal than the Conservatives. But Mr Blair's record in this respect has not been inspiring. From the Ecclestone affair to Peter Mandelson's resignations to Mr Blunkett's recent difficulties, Labour has been found wanting. Those lucrative shares had to be virtually wrenched from Mr Blunkett's grasp this week.

It is wholly unsatisfactory for Mr Blunkett to say that this matter is closed. And it is ridiculous for the Prime Minister to argue that Mr Blunkett should stay because he has such an important job to do. Standards in public life matter. Mr Blunkett has become a liability to the Government.